Market Roundup
- Gold firms amid doubts over U.S.-China trade deal
- Eurozone industry output nudges up
- Chances of no-deal Brexit fall - Reuters poll
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. consumer price index likely increased 0.3 percent in October, while in the 12 months through January, the CPI is expected to have risen 1.7 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, from 0.1 percent in the previous month.
- (1400 ET/1900 GMT) The U.S. reports its monthly budget statement for the month of October. The government is likely to show a budget deficit of $133 billion after posting a surplus of $83 billion in the previous month.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (1100 ET1600 GMT) Federal Reserve Chair Jerome Powell testifies before Congress.
- (1230 ET1730 GMT) Federal Reserve Bank of Richmond President Thomas I. Barkin gives a speech
- (1330 ET1830 GMT) Federal Reserve Bank, at Minneapolis President Neel Kashkari's speech
FX Beat
DXY: The dollar index rallied to a near 1-month high ahead of U.S. Federal Reserve Chairman Jerome Powell's testimony on the economic outlook before the congressional Joint Economic Committee. The greenback against a basket of currencies traded flat at 98.34, having touched a high of 98.45 earlier, its highest since October 15.
EUR/USD: The euro rebounded from a 1-month low after data showed Eurozone industrial production rose in September for a second straight month to beat expectations, as output declines in Germany and Italy were offset by increases in France and the Netherlands. The European currency traded flat at 1.1012, having touched a low of 1.0999 earlier, its lowest since October 15. Immediate resistance is located at 1.1035 (5-DMA), a break above targets 1.1062. On the downside, support is seen at 1.0985, a break below could drag it below 1.0957.
USD/JPY: The dollar plunged, extending losses for the fourth straight session, as a speech by U.S. President Donald Trump dashed hopes for a positive sign on a U.S.-China trade deal. The major was trading 0.05 percent down at 108.93, having hit a low of 108.85 earlier, its lowest since Nov. 7. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index, monthly budget statement and Fed officials' speeches. Immediate resistance is located at 109.62 (May 31 High), a break above targets 109.92 (May 30 High). On the downside, support is seen at 108.75 (21-DMA), a break below could take it near at 108.49.
GBP/USD: Sterling nudged higher after a Reuters poll showed the chances of a no-deal Brexit easing in the last month because UK Prime Minister Boris Johnson looks set to win a December 12 election and secure the backing in parliament he needs to get his new Withdrawal Agreement passed. The major traded 0.1 percent up at 1.2854, having hit a high of 1.2897 on Monday, it’s highest since November 5. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2917, a break above could take it near 1.2972 (November 1 High). On the downside, support is seen at 1.2794, a break below targets 1.2768. Against the euro, the pound was trading flat at 85.66 pence, having hit a high of 85.57 on Monday, it’s highest since May 8.
USD/CHF: The Swiss franc rose to 1-week peak after U.S. President Donald Trump said that the two countries were close to finalising a trade deal, but he fell short of providing a date or venue for the signing ceremony. The major trades at 0.3 percent up at 0.9903, having touched a high of 0.9978 on Friday, it’s highest since October 16. On the higher side, near-term resistance is around 0.9983 and any break above will take the pair to the next level till 1.0007. The near-term support is around 0.9887, and any close below that level will drag it till 0.9850.
Equities Recap
European shares plunged from 4-year highs after U.S. President Donald Trump threatened to substantially increase tariffs if China failed to agree a trade deal.
The pan-European STOXX 600 index tumbled 0.6 percent at 404.36 points, while the FTSEurofirst 300 slumped 0.5 percent to 1,586.52 points.
Britain's FTSE 100 trades 0.6 percent down at 7,323.65 points, while mid-cap FTSE 250 declined 0.9 to 20,240.16 points.
Germany's DAX eased 0.8 percent at 13,175.66 points; France's CAC 40 trades 0.5 percent lower at 5,889.61 points.
Commodities Recap
Crude oil prices declined as prospects for a trade deal between the United States and China faded, weighing on the outlook for the global economy and energy demand. International benchmark Brent crude was trading 1.1 percent down at $61.29 per barrel by 1050 GMT, having hit a low of $60.65 on Friday, its lowest since November 1. U.S. West Texas Intermediate was trading 0.8 percent lower at $56.29 a barrel, after falling as low as $55.74 on Friday, its lowest since November 1.
Gold prices surged after a speech by U.S. President Donald Trump dashed hopes for a positive sign on a U.S.-China trade deal. Spot gold rose 0.5 percent to $1,463.86 per ounce by 0628 GMT, having touched a low of $1,445.51 on Tuesday, its lowest August 5. U.S. gold futures advanced 0.7 percent to $1,463.30 per ounce.
Treasuries Recap
The U.S. Treasuries surged during the afternoon session ahead of the country’s consumer price inflation (CPI) for the month of October, scheduled to be released today by 13:30GMT. In addition, Federal Reserve Chair Jerome Powell is due to deliver a keynote speech, also today by 16:00GMT, besides, a speech by FOMC member Kashkari, due at 18:30GMT, which shall provide further direction into the debt market. The yield on the benchmark 10-year Treasury yield slumped 3 basis points to 1.877 percent, the super-long 30-year bond yield also suffered 3 basis points to 2.355 percent and the yield on the short-term 2-year traded nearly 2 basis points lower at 1.632 percent.
The United Kingdom’s gilts jumped during European trading hours after the country’s consumer price inflation (CPI) for the month of October, came in lower than market expectations, while investors keep a close eye on Britain’s retail sales for the similar period, scheduled to be released on November 14 by 09:30GMT, for further direction in the labour market. The yield on the benchmark 10-year gilts, plunged 5 basis points to 0.756 percent, the 30-year yield also slumped nearly 5 basis points to 1.267 percent and the yield on the short-term 2-year traded 3-1/2 1 basis points down at 0.526 percent.
The German bunds jumped during European trading session after the country’s consumer price inflation (CPI) for the month of October remained steady, with eyes still on Germany’s gross domestic product (GDP) for the third quarter of this year, scheduled to be released on November 14 by 07:00GMT, will provide further insight into the debt market. The German 10-year bond yield, which move inversely to its price, slumped nearly 4 basis points to -0.282 percent, the yield on 30-year note plunged 5 basis points to 0.208 percent and the yield on short-term 2-year slipped 1-1/2 basis points to -0.639 percent.
The Australian government bonds remained flat during Asian session amid a muted trading day that witnessed data of little economic significance. However, U.S.-China trade tussle continues to draw headlines in the financial market ahead of Australia’s employment report for the month of October, scheduled to be released on November 14 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained steady at 1.276 percent, the yield on the long-term 30-year bond also flat at 1.881 percent and the yield on short-term 2-year hovered around 0.861 percent.
